A recent report collated by Global Data assessing the high-net-worth home insurance market in the UK identified that its £671 million price-tag in 2022 was largely attributable to two key factors – the rising number of HNW individuals and ‘surging’ double-digit premium rates. And with the GWP of the sector expected to grow at a CAGR of over 6% between 2022 and 2026, the HNW market appears ripe with opportunities for brokers looking to differentiate their client propositions.
That’s not to say that there’s not an array of challenges facing the HNW insurance sector in 2023, as highlighted by Stuart Bromley (pictured), head of personal lines underwriting at Munich Re Specialty Insurance (UK) in a recent interview with Insurance Business. Among the central challenges facing the market, he emphasised the “huge” impact inflation is having, particularly on claims – which is having a knock-on effect on rating adequacy.
“Insurers need to regularly assess the market so as not to find themselves behind the curve,” he said. “For example, escape of water claims continue to be an issue. The economic environment has also seen an uptick in fraudulent claims, so it is imperative that insurers have the right tools and risk management processes in order to stay on top of potential issues.”
Bromley underscored the role broker feedback plays in enabling him and his team to mitigate the impact these challenges are having on their broker partners. By gaining feedback from brokers and the wider market, he said, they are able to ensure that any rating changes are “sensible and sustainable”, and communicated and carried out in a transparent manner.
“We have made improvements to our wording to take account of market trends which ultimately helps the end client,” he said. “[In addition], we are creating thought leadership pieces on specific topics which will help to guide our brokers and clients in terms of managing their risk.”
This broker-centric proposition recently received clear affirmation, with GJW Private Clients recognised by the Highpoint ‘HNW Home Report 2023’ as the leading HNW provider for 2022/23. The accreditation was due to a lot of hard work, he said, as well as the fact that 80 brokers gave 100% positive feedback about the quality of Munich Re Specialty Insurance’s service.
Digging into the central findings of the report, Bromley noted across the board, due to a hardening rate environment and M&A activity, the market has contracted in terms of the number of available players in the sector. Service is a key driver for success, he said, and some established players have suffered as a result of poor service, which has been reflected in the report.
The power of exceptional service in the HNW insurance space was perhaps the key takeaway of the Highpoint report, with brokers clarifying their demand for a service-driven, flexible solution from their insurance partners. As to what differentiates the exceptional from the good when it comes to the HNW market, Bromley highlighted that brokers require exceptional service at all points of the journey – both pre- and post-inception, at claims and at renewals.
“Brokers require speed, accuracy and transparency and access to decision makers,” he said. “If a risk isn’t suitable, they want to know quickly to meet their customers’ needs. They need to trust the people they are speaking with to deliver suitable and sensible terms for their clients.
“Confidence is paramount to brokers. We put a lot of stock in having claims excellence behind our products. This is massively important in order for clients and brokers to gain confidence in a product which has a higher price point than a standard product.”
Returning to the value of feedback in taking the temperature of the HNW insurance market, Bromley noted that he and his team endeavour to keep the customer at the heart of all their decision making. Clients and brokers are the single most important factor in whether an insurer or product is deemed a success, he said - therefore, it is critical to constantly get feedback on how things can be improved.
“This is the only way we’ll stay ahead of the competition and be able to deliver a first class service to our brokers and clients,” he said. “The market also moves quickly with changes of appetite, rates, emerging risks and the like so staying close to brokers and clients allows firms to evolve and adapt.”
As for what’s top of the agenda for him and his team in 2023, Bromley said that it all comes down to continuing to offer a market leading, service-led solution for their brokers and clients alike.
“And if we keep doing that,” he said, “we hope to be recognised again in the Highpoint report next year too.”
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